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ATTENTION ALL INTERESTED PARTIES: Indiana Economic Recovery Threatened by Anti-Immigrant Legislation

February 24, 2011

TO: Interested Parties

FROM: Ali Noorani, National Immigration Forum

RE: Indiana Economic Recovery Threatened by Anti-Immigrant Legislation

DATE: February 23, 2011

The voters of Indiana want solutions. Responsible elected officials and policy-makers in Indiana must navigate the hot-button issue of immigration away from costly, divisive and controversial proposals and toward solutions that focus on the state’s pressing needs.

The Arizona-style bill (Senate Bill 590) was introduced by Senator Mike Delph. It has passed the Senate and now goes to the House for consideration. Governor Mitch Daniels, who may run for the Presidency in 2012, has not indicated whether or not he supports the bill.

The state of Indiana has been praised for getting its budget shortfall under control. However, budget scholars warn that things are still tough. Indiana was hit harder than most states by the recession. Unemployment is likely to remain at 10% in 2011, higher than the national rate. Also, the state’s unemployment insurance fund is bankrupt.
The business community and farmers are among the voices opposing the bill. The hotel and restaurant industry in Indiana warns it could suffer a similar loss of business and workers just as the Arizona convention industry has due to the boycott. The Urbana, a company that previously held a conference in Indiana, said SB 590 would play into consideration for future events. Farmers, calling for a dependable migrant labor force, have testified against the Arizona-inspired bill. Also, two of Indiana’s largest employers (Eli Lilly and Cummins, Inc.) have expressed opposition to the bill stating that it hinders businesses from competing in the global market.

Senate Bill 590 is expected to cost state police about $5 million a year to implement. However, those are believed to be conservative estimates. Based on estimates by an Arizona sheriff, implementation costs for a similar law could cost Arizona hundreds of millions of dollars. Also, the Pew Hispanic Center estimates that the Arizona copycat would cost Kentucky $40 million a year.

If Indiana wants to continue improving its economic growth, it cannot afford a law like Arizona’s SB 1070 that has enormous social and fiscal costs in the form of fractured communities, legal fees and implementation costs.
The Attorney General joined advocates in signing the Indiana Compact, a proactive effort to guide the immigration debate in Indiana and stated that immigration enforcement should be handled at the federal level, not the state level.

Senator Delph has previously quoted a study by the Federation for Immigration Reform that indicates it costs Indiana $608 million to educate, incarcerate and provide healthcare for undocumented immigrants. Those fiscal costs alone do not account for the contributions undocumented immigrants make in Indiana. Responsible lawmakers know that immigrants contribute considerably to the state economy. Research by the Immigration Policy Center indicates that Indiana would lose more than $2.8 billion in economic activity, $1.3 billion in gross state product and approximately 16,739 jobs if all undocumented immigrants were removed from the state.
Indiana can avoid following in the dangerous footsteps of Arizona by passing fiscally responsible legislation that fixes the economy and creates jobs. The National Immigration Forum’s report, “Deficits, Lawsuits and Diminished Public Safety: Your State Can’t Afford SB1070”, found that anti-immigrant measures at the state level cost millions of tax dollars, chase away business and limit public safety.

Arizona’s controversial SB 1070 legislation, drafted with assistance from private prison industry lobbyists, has been costly. A study by the Center for American Progress estimates that Arizona has already lost over $9 million in tax revenues and $253 million in lost business alone. If fully implemented, SB 1070’s impact on Arizona’s state budget is estimated to cost between $150 million to $215 million dollars, without the millions in legal fees required to defend the legislation from federal and other lawsuits.

Aside from their inherent policy and constitutional flaws, policies like those enshrined in SB 1070 risk further exacerbating budgets woes, and divert attention from away from more pressing issues facing state legislatures like the economy, jobs and education. It is clear however, that states will continue to have these costly debates until immigration reform is passed on the federal level.

To read more about the Indiana budget cuts, the economic power of immigrants in Indiana, and the potential impact of an Arizona SB 1070-style law, please see the links below.

Lilly and Cummins Express Compelling Reasons to Oppose SB 590, Alliance for Immigration Reform in Indiana

Daniels in tight spot on immigration, Indiana Star, February, 2011

Counterpoint: Five principles to guide public policy debate, Indiana Star, February, 2011

Some worry convention business could suffer if immigration bill passes, Indiana Star, February, 2011

Indiana’s budget panel projects better days, Courierpress.com, December 2010

Indiana: An Island of calm in state budget storms, CNNMoney.com, February, 2011

Arizona-inspired bills lose momentum in other states, The Washington Post, January 2011

The Political and Economic Power of Immigrants, Latinos, and Asian in Indiana, Immigration Policy Center, July 2010

Checklist for Estimating the cost of SB 1070-style Legislation, Immigration Policy Center, January 2011

Q&A Guide to State Immigration Laws, Immigration Policy Center, January 2011

Unconstitutional and Costly: The High Price of Local Immigration Enforcement, Center for American Progress, January 2011

Local Immigration Enforcement Cost by the Numbers, Center for American Progress, January 2011

* This memo is one of a series of state level periodic snapshots of how SB 1070-style laws and other measures seeking to marginalize immigrants only serve to further worsen state fiscal problems. Please contact Dawn Mabery at dmabery@immigrationforum.org or (202) 383-5996 with questions, requests or comments.

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